Research and Trading Portal for US-listed China Stocks · September 26, 2017

China Tracker - Details for Fuqi International (FUQI)

Fuqi International

Analyst Coverage

2011-03-28

Roth Capital

Downgrade

Suspended

n/a

2011-03-28

Merriman Curhan Ford

Downgrade

Terminated

n/a

2010-12-31

Rodman & Renshaw

Downgrade

Terminated

n/a

Effective immediately, we are discontinuing research coverage of FUQI to better allocate resources within our coverage universe. Effective upon the termination of coverage any of our prior financial projections on this stock should not be relied upon. Our last rating on FUQI was Under Review.

2010-09-30

Roth Capital

Reiteration

Neutral

$7.00

Yesterday FUQI announced it had received a delisting notification from Nasdaq due to its failure to timely file SEC periodic reports, which is due to the restatement process that has been underway for several months to correct the accounting for inventory and cost of sales. As previously reported, we recently touched several different aspects of FUQI's operations and based on these checks, we concluded that its wholesale and retail businesses are fully functional. However, with information lapses on wholesale growth, new store openings, forward gross margin levels, the balance sheet and the SEC investigation (management is fully cooperating but there has been no additional insight into the specifics), it is hard to be anything other than cautious about the stock. Thus, even though our "back-of-the-envelope" calculations come up with a tangible book value of ~$7.60, we think the stock remains range bound until the restatement happens and until there is greater clarification regarding the SEC investigation. Accordingly and based on yesterday's ~12% stock price increase, we retain our Neutral rating and $7 price target.

2010-09-20

Roth Capital

Reiteration

Hold

$7.00

We are lowering our FY10 estimates based on our belief there will be additional margin pressure related to the restatement process, SEC investigation and a more competitive environment due to rising gold prices. Our revised FY10 estimate is $1.10 versus $1.20. As for the SEC investigation, management could not provide any additional color other than it is fully cooperating with the SEC. We are lowering our price target to $7 reflecting the earnings change.

2010-09-09

Cowen & Co

Downgrade

Neutral

n/a

2010-09-09

Rodman & Renshaw

Reiteration

Market Perform

n/a

Subpoena Received: FUQI announced that it has been notified by the SEC of a formal investigation and received a subpoena for certain documents regarding its failure to file its financial results on time. On March 16, 2010 we put FUQI under review in relation to its delayed 2009 10-K filing. On August 17, 2010 the company received notification from NASDAQ for being out of compliance with NASDAQ Marketplace Rule 5250(c)(1), requiring timely filing of SEC periodic reports. The company was granted an exception deadline of September 28, 2010, by when it has to file its 10-K and 10-Q forms for FY09, 1Q FY10, and 2Q FY10. The SEC investigation is another hurdle for the company to overcome. How the SEC investigation and its outcome impact existing lawsuits against the company adds another layer of uncertainty to an already complicated situation. At a minimum, management needs to complete the required filings with NASDAQ in a timely manner to retain its listing status. We will revisit our financial projections and rating once management completes the auditing process and files its 10-K/10-Q forms with SEC.